Home Based Business Insurance

If you're not insured - and if you should have been - you could ruin your finances. So, better safe than sorry.

This is down to the law in your country. There are three ways to find out.

I'd suggest that the best way to find out is to phone a local insurance broker who deals with insuring small businesses.

A second possibility is to approach a business consultant, and in particular a government small business advice organisation that covers matters such as finance and small business insurance.

Thirdly, you could ask some owners of other local home or small businesses. However, they may not by aware of the laws on how a home business needs to be insured. That's why it's better to check with expert insurance advisors.

Typically, though, these are the sort of topics where you might need home based business insurance:

• Public Liability - this is where a member of the public blames you for some damage to them or their property, whether the incident takes place when they visit your home office or elsewhere. For example, you might accidentally knock a cup of coffee into their highly expensive machinery.
• Professional Indemnity - this is where part of your business involves selling your knowledge or skills - for example if you are an accountant. If your advice is negligent and causes loss, you could face a claim.
• Home Office Buildings - you need to check with your insurer whether your home buildings policy covers your home business activities.
• Office Equipment - again you can check whether you are covered by your home contents policy.
• Special Items - explain exactly what your business entails to the insurance company so they can check out whether there is anything else that needs to be insured.

The cheapest option may well be an extension to your home buildings and contents insurance.

Bear in mind that some of these insurances may be a legal requirement - such as public liability or professional indemnity, whereas equipment insurance (say for your laptop) may be optional.

But it may still make sense to take an insurance even where you have a choice. For example, if you rely on your computer for making money, it may well be worth insuring against accidental damage.

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